0% financing deals on cars in Canada

When shopping for a new car, you’ll come across advertisements with extremely low interest rates – sometimes even 0% car financing deals. But you may be wondering if those offers are too good to be true? Before signing on the dotted line and driving off the lot, read this guide to learn the ins and outs of 0% financing. Plus, find out who is offering 0% financing in Canada in August 2023 among some of the most popular car brands.

Who is offering zero percent financing on cars in Canada?

In Canada, dealerships and loan brokers can help you with 0% financing promotional deals. But 0% financing deals are hard to come by in the current environment because of the ongoing shortage of new cars and the series of rate hikes by the Bank of Canada. To find the lowest rates available on the market, whether that’s 0% financing or slightly higher, an option is to apply to a loan broker like Loans Canada, who’s partnered with many dealerships to find the best offer for you.

Loans Canada Car Loans

• Rates from 0.99% - 46.96%
• Borrow $500 - $35,000
• Get matched with multiple offers

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Latest 0% financing deals on cars in Canada

Check out the table below to see who is offering 0% financing on cars in Canada in September 2023, or some of the lowest rate financing deals available, from popular car brands.

Brand	Starting low rate finance deal (APR)	Vehicle & loan term
Chevrolet	0.99%	2023 Silverado 1500, offer excludes ZR2 and High Country Trims (up to 60 months)
GMC	0.99%	2023 Sierra 1500, offer excludes AT4X, Denali and Denali Ultimate Trims (up to 60 months)
Ford	1.99%	2023 Escape (up to 60 months)
Ford	2.99%	2024 Edge (up to 72 months)
Ford	2.99%	2023 Mustang (up to 72 months)
Mitsubishi	2.99%	2024 and 2023 Eclipse Cross (loan terms not disclosed)
Mitsubishi	2.99%	2023 Mirage (loan terms not disclosed)
Audi	3.48%	2023 A4 (60 months)
Subaru	3.49%	2023 Forester (24 months)
Cadillac	3.49%	2023 CT4 (up to 36 months)
Cadillac	3.49%	2023 CT5 (up to 36 months)
Audi	3.98%	2023 A5 Coupé (60 months)
Audi	3.98%	2023 Q7 (60 months)
Volvo	3.99%	2023 XC90 (60 months)
Volvo	3.99%	2023 XC40 (60 months)
Ford	3.99%	2023 Bronco Sport (up to 72 months)
Ford	3.99%	2023 Explorer XLT (up to 72 months)
Subaru	3.99%	2023 Solterra (24 months)
Subaru	3.99%	2023 Ascent (24 months)
Subaru	4.49%	2024 Outback (24 months)
Subaru	4.49%	2024 Impreza (24 months)
Subaru	4.49%	2024 Crosstrek (24 months)
Subaru	4.49%	2023 WRX (24 months)
Buick	4.99%	2023 Envision (up to 48 months)
Buick	4.99%	2023 Encore GX (up to 48 months)
Buick	4.99%	2023 Enclave (up to 48 months)
Chevrolet	4.99%	2023 Equinox (up to 48 months)
Chevrolet	4.99%	2023 Blazer (up to 48 months)

Offers last verified on Sept. 1, 2023 and expire at the end of the month. Offers are on approved credit, vary by region and may have other conditions.

0% financing in one province, such as Ontario, may not be available in other provinces

The types of financing offers advertised by dealerships will depend on where you live. So the low or 0% financing car deals at Ontario dealerships could be different to the deals offered at dealerships in Alberta or BC. Plus, the deals you qualify for will depend on factors like your credit score, income and if you include a down payment.

So when you’re ready to shop for your new car, check with your local dealerships to find out what financing offers are available at the time.

What car companies are offering 0% financing in Canada?

Currently, there are no car companies in Canada offering 0% financing. The lowest available is 0.99% from Chevrolet and GMC. This is based on our research of September 2023 offers from 22 car brands in Canada.

Where can you get 0% financing on trucks?

The car brands that are currently offering the lowest financing offers are Chevrolet (0.99% for the 2023 Silverado 1500, offer excludes ZR2 and High Country Trims) and GMC (0.99% for the 2023 Sierra 1500, offer excludes AT4X, Denali and Denali Ultimate Trims).

Plans to get a new vehicle

In the recent Finder: Consumer Sentiment Survey Q2, 15% of respondents plan to take out a car loan in the next three months.

More than a third of Canadians (35%) who plan to buy a vehicle in the next three months, expect to make the purchase at a new car dealership.

What does 0% financing mean on a car loan?

A 0% financing offer allows you to borrow money to buy a vehicle without having to pay interest and financing fees, which combined is known as the annual percentage rate (APR). This type of financing is mostly offered by dealerships as a way to sell more cars. It is usually reserved for customers who have excellent credit (usually above 700).

Banks or other lending institutions do not typically offer 0% financing on cars in Canada because these institutions have nothing to gain by offering them to you. On the other hand, a dealership will be more willing to offer 0% car financing deals because at least you’re driving one of its cars off of the lot and moving inventory.

0% financing sounds too good to be true. What’s the catch?

At first glance, 0% financing on a car is exactly as it appears: You purchase a new car at the agreed-on price, and then make monthly payments on the principal of the car with no interest for a set number of months. However, keep these points in mind:

• 0% interest may only be offered for part of the loan term.
• To be approved, you’ll need spectacular credit (above 700).
• Negotiating the car price will be difficult.
• 0% car financing deals are only available for certain models.
• You may not get as much money for your trade-in vehicle.
• The loan structure will likely be set in stone.

Pros and cons of car deals with 0% finance

Pros

• 0% interest. Paying no interest on your car loan can save you hundreds or thousands of dollars in the long run (depending on your loan amount).
• One-stop shop for financing. Dealerships offer 0% financing in Canada on car loans so you can drive off the lot in your new vehicle with a single transaction.
• Faster repayment. You’ll usually be able to pay 0% financing car loans off faster than you would with a traditional car loan (because terms are often shorter and there’s no interest).
• Lets you upgrade your car choice. You may be able to afford a more expensive vehicle or luxury upgrades such as a sunroof or alloy wheels with a 0% car loan.

Cons

• Only available from dealerships. 0% car loans are typically only offered by dealerships, which means you can’t get them from the bank or another lender.
• More limitations. You may only be able to get financing for certain kinds of vehicles with 0% car loans, such as those that the dealership is trying to move out of its inventory.
• More difficult to qualify. You can only qualify for a 0% car finance offer if you have good to excellent credit and a high income.
• Higher monthly payments. 0% financing often come with shorter terms to reduce the risk that you’ll default (which means higher monthly payments).
• Risk that you’ll pay more. You could end up paying a higher price for your vehicle to make up for the lower interest rate (so your dealer still cuts a higher profit).
• May be a limited offer. You may only get 0% financing for a portion of your loan amount or as an introductory offer for a limited amount of time.

How to get 0% financing on new cars in Canada

To get a 0% car financing in Canada, you’ll need to do your homework to make sure you get the best deal. Follow these steps to get started:

1. Check your credit score. Your first step in qualifying for a 0% car loan is to make sure your credit score is in excellent shape. You can do this by requesting a copy of your score from a major credit bureau such as Equifax or TransUnion.
2. Shop around. Decide which vehicle you want to buy in advance and then shop around with a number of dealerships to compare prices. This makes sure you find a dealership that’s offering a reasonable price for the vehicle you’re interested in.
3. Call the dealership. Call the dealership you choose to find out if it’s currently offer 0% financing on any models. If not, you can make your way down the list of dealerships you’ve compared until you find one that offers 0% car financing.
4. Gather your documentation. When it’s time to visit the dealership, you’ll want to bring along information about your credit score and monthly income. If your credit score is low, you likely won’t qualify for 0% financing and may need to explore other options.
5. Negotiate the deal. Work with your dealer to get the best deal possible on your loan. And keep in mind that there are always other options if your dealer won’t budge on certain conditions.

Red flags to watch out for with 0% car finance deals

There are a few red flags you’ll want to keep an eye out for when shopping around for a 0% financing in Canada:

• False promises. You should steer clear of lenders that offer 0% financing without checking your credit score or financial details.
• Higher vehicle prices. Avoid lenders that offer 0% car financing deals but have much higher vehicle prices than other dealerships in your local area.
• Introductory offers. Keep an eye out for deals that offer 0% financing for only a short introductory period but then start charging interest mid-way through your term.
• Bad customer reviews. Double-check online reviews for the lender you want to go with before you sign onto a loan contract to make sure there are no major issues.

Alternatives to 0% financing on cars in Canada

There are a number of alternatives to 0% financing that you might want to consider when shopping for your next vehicle:

• Low interest car loans. You’ll usually need a credit score of at least 660 to qualify (and your score will go down if you don’t make your payments).
• Guarantor loans. Guarantor loans may be a good way to get a car loan if you have a poor credit score. This involves asking a friend or family member with good credit to cosign with you so you can get lower interest rates.
• Online car loans. Online car loan brokers let you compare interest rates from a number of different lenders all across Canada to find the best deal.

Compare car loans in Canada

If you can’t qualify for 0% financing in Canada, you can still lock in a low interest rate for your specific financial situation. Compare car financing options below to see what lenders and rates you may be able to qualify for.

How to get a good deal without a 0% interest car loan

There are a number of things you can do to get a better offer on your next vehicle even if you don’t qualify for 0% financing deals. These include the following:

• Get pre-approved. It makes sense to get pre-approved for a car loan to find out how much you have to spend before you start shopping. This will give you a good bargaining chip to drive the price of your vehicle down when you get to the dealership.
• Compare prices. Shop around with multiple lenders to get the best rates on your loan. Once you know how much you have to spend, shop around with multiple dealers to find the best price on offer for the vehicle you want.
• Shop for a used vehicle. Check out online offers for used vehicles or ask to see the inventory of used cars with your dealer. Just be aware that it can be more difficult to get financing if the vehicle is older or has high mileage. Learn more about buying a used car.
• Look for sales or special offers. Wait for sales such as employee-pricing events or cash-rebate offers to save the most money on your car. This will let you drive off the lot with the best deal possible.
• Improve your credit score. Work on improving your credit to make sure you can qualify for the lowest interest rates available. Start by finding out what credit score you need to get approved for a car loan.

Can I get 0% financing if I have bad credit?

Car dealers with 0% financing aren’t able to offer this to people with bad credit. This is because they will have to take a big financial risk by offering you a 0% car loan.

What your bad credit tells your dealer is that you have a history of missing loan payments or defaulting on your financial obligations. The best way to get around this is to improve your credit score so that lenders see you as a reliable customer. Until then, you may end up paying higher interest rates to make up for the risk lenders have to take in giving you money.

Bottom line

Getting 0% car financing deals can save you money on interest rates and let you pay your car loan off faster. The main downside of these loans is that they come with strict eligibility requirements and are usually only offered by car dealerships. But even if you can’t qualify for 0% financing in Canada, you can still lock in a low interest rate by carefully comparing your options and getting prequalified with a variety of lenders.

Frequently asked questions about 0% financing

• Can you still get 0% finance on cars?

  Offers of 0% financing are a lot less common in Canada these days because of the shortage of new cars. Brands that have recently offered 0% financing or slightly higher rates include Jeep, Ford, Chevrolet, Ram and GMC.

• Do I need a down payment for a 0% financing?

  That depends on your lender. A down payment can help you pay your loan back much faster and it also shows your lender that you have savings. You can also make sure your car doesn't depreciate beyond what it's worth by making a large down payment.

• Can I get 0% financing for a used car?

  Almost never. If you're offered a 0% car loan for a used car, you should read the fine print to see if there are any extra costs or fees to make up for the lack of interest being charged. It's also possible that your dealer is overcharging you for the vehicle to make up for the 0% interest rate.

• Can I get 0% financing on new cars in Canada?

  It's possible to get approved for 0% financing on new cars in Canada if you have a strong credit score and meet other eligibility criteria. In the current environment, however, it's rare for dealerships to offer 0% financing deals.

• What credit score do I need to qualify for 0% car financing deals?

  You'll usually need a credit score of at least 700 to even be considered for 0% financing in Canada. This number may be even higher depending on which lender you apply with.

• Can I get 0% financing on cars in Ontario?

  It's difficult to get 0% financing on cars in Ontario today because of the ongoing shortage of new cars. If you're looking for 0% financing deals, your best bet is to apply to a car loan broker or visit your local dealerships to discuss your options.

• What does APR mean?

  APR is an acronym for Annual Percentage Rate, which is the standard way of calculating interest on a car loan. APR refers to the cost of a loan, including both interest and fees, that would be accrued and charged over the course of a year, or 365 days.